Monday, August 11, 2014

"This Changes Everything"

The theme of the book echoes what has been written here for years - we cannot survive capitalism. Free market capitalism, enshrined by neo-liberalism, guarantees that we will perish. It should be alarming that all of our big 3 political leaders today are devoutly neo-liberal. Harper, Trudeau and Mulcair are unquestionably neo-liberal.

Here are a few excerpts from posts of the past.

January, 2012: "Capitalism No Longer Fits." - "Capitalism, in its current form, no longer fits the world around us." What a curious thing for the founder and chairman of the Davos World Economic Forum, professor Klaus Schwab to declare. "A global transformation is urgently needed and it must start with reinstating a global sense of social responsibility," he added.

"Growing inequities within and between countries and rising unemployment are no longer sustainable ... We must rethink our traditional notions of economic growth and global competitiveness, not only by focusing on growth rates and market penetration, but also, equally — if not more importantly — by assessing the quality of economic growth."

January, 2014: "A Reformed Capitalism for the 21st Century." - As we steadily run out of resources, we'll need to devise some sort of allocation system to replace the free market model of the past two centuries. It would be entirely sensible, if we are to start living within the finite limits of our environment, to require those who want access to resources to justify themselves.

What do they intend to produce? How is it superior to other products? How much research and development has gone into the product? To what extent is it durable, upgradeable? What will be the lifespan of the product? How will it improve the consumer's quality of life? What will be the resources to production ratios? What will be the resources to utility ratios? How much of it will be made with recycled materials and how much will be recyclable at the end of its lifespan? How will it be produced? What will the manufacturer do to curb emissions and other forms of environmental degradation?

What if we could deter companies from making enormously wasteful, useless junk? Imagine if we could withhold energy and resources from the production of crap?

August, 2011: "Kapitalism = Capitalism - Regulation." - What we're learning the hard way is that capitalism works best for us when it's subordinate to the state, that is to say it's regulated. Today the evidence is inescapable that capitalism without regulation becomes the Kapitalism that Marx foresaw.

A word about deregulation. When you see a politician preaching deregulation you should immediately look for the "for sale" sign tattooed on his forehead. A politician in a mood to deregulate is generally a politician with something to sell. What he's selling, in many cases, is the public interest but, of all the forms of political larceny, deregulation is, hands down, the safest. Sell government assets out the back door and you can go to jail. Get caught fixing a contract and you may be headed for the Greybar Hotel. Push through deregulation and you're merely freeing up the economy. That's why there are six registered lobbyists for every member of the House and Senate - to buy subsidies, tax favouritism, and deregulation for the rich and powerful.

February, 2012: "The Myth of Free Market Capitalism." - Barry Lynn explores this in a fascinating essay in this month's Harper's , "Killing the Competition, How the New Monopolies are Destroying Open Markets." Lynn traces the powerful narrowing of control of American market sectors, transforming small producers into serfs to an insidious form of feudal capitalism.

"...every day, there are fewer buyers; fewer of them. Hence they enjoy more and more liberty to dictate terms - or simply to dictate.

"...monopolization of our public markets is first and foremost a political crisis, amounting to nothing less than the re-establishment of private government. What is at stake is the survival of our democratic republic."
August, 2011: "What Adam Smith Didn't Know." - Now it's Paul Woolley speaking out. The expert in market dysfunctionality who founded a research institute into the subject at the London School of Economics, tells Der Spiegel that today's markets are spinning out of control.

The developments in recent weeks have made it quite clear that the markets don't function properly. Things are spinning out of control and are potentially dangerous for society. Only a fraternity of academic high priests connected to the finance markets is still speaking of efficient markets. Still each market participant is pursuing their own selfish interests. The market isn't reaching equilibrium -- it's falling into chaos.

...The finance sector can -- and is -- growing until it overwhelms the economy. In good years the US finance industry cashes in on more than 40 percent of all corporate profits. In bad years they are saved by the taxpayers. The agents are doing a devilishly good job of developing innovative, complicated new products that people can't understand. It gives them the opportunity to earn excess returns and attract the best talent. While they are acting rationally, the result is a catastrophe.
The thrust of these posts is that both nationally and globally, free market capitalism has reached the point where it has rendered us economically and environmentally dysfunctional. It has led us, much as Marx predicted, to the edge of the abyss, to collapse. Our political leadership will not see the writing on the wall no matter how obvious and plain. The measure of their madness is that they still cling to neo-classical economics and its fixation with perpetual, exponential economic growth.

As for Ms. Klein and her new book, she sees the onset of global warming as delivering up an incentive for us to abandon traditional capitalism. It's our last, best chance to remake our world.